What is the Bible’s view on bankruptcy as a last resort to get out of the burdens and harassment of creditors?

I am not aware of any scriptures which directly address the subject of bankruptcy. But there are passages which teach us NOT to go into debt. Romans 13:8 declares, “OWE NO ONE ANYTHING except to love one another” (NKJV). Proverbs 22:7 says, “The rich ruleth over the poor, and THE BORROWER IS SERVANT TO THE LENDER.” Being in debt puts one into a state of bondage and thus the Lord commands us to “owe no one anything.”

Perhaps the inquirer is already facing a huge debt and considering some form of bankruptcy. I say “some form of bankruptcy” for there is “Chapter 13 bankruptcy” which allows you to set up some kind of a payment plan, and then there is “Chapter 7 bankruptcy” where one is not able to pay anything back to their creditors. If you are a Christian it would be much more honorable for you to choose “Chapter 13” which would allow you to still pay your debt. If you were to choose “Chapter 7” you would be guilty of disobeying Romans 13:8 and you would be classified as “wicked” according to Psalm 37:21 which reads, “The wicked borrows and does not repay” (NKJV).

Before leaving my reader to think about what we have said, I would like to address the subject of “spiritual bankruptcy.” Everyone that was born into this world was “born in sin.” King David put it this way in Psalm 51:4, “Behold, I was shapen in iniquity; and in sin did my mother conceive me.” Besides being born sinners, everyone “has sinned.” Romans 3:23 states, “For all have sinned, and come short of the glory of God.” Did you know that every “sin” we commit is a “legal debt to God?” This is borne out in Luke 11:4 which reads, “And forgive us our SINS, For we also forgive everyone who is INDEBTED to us” (NKJV). When we sin we are breaking God’s commandments and there is a punishment for breaking His law. Romans 6:23 tells us, “For the wages of sin is DEATH,” and Hebrews 9:27 says, “And as it is appointed unto men once to die, but after this the JUDGMENT.” DEATH and JUDGMENT is God’s two-fold penalty for sin! And to make matters worse, there is nothing we could do to “pay our debt to God” to avoid this two-fold penalty for sin. We are “spiritually bankrupt” before God!

That’s the BAD NEWS, but there is GOOD NEWS. Though we could never “pay our debt to God,” there is one who has paid our debt for us. The gospel of Jesus Christ declares that Jesus Christ assumed our debt of sin on the cross and in infinite love for you and me He took the DEATH and JUDGMENT that we deserved. Again, we had broken God’s Law and deserved to be punished, but He took up our cause and paid the debt that the Law demanded. After He exhausted God’s judgment on the cross He cried out in victory “It is finished” (John 19:30). Those three words are actually one word in the Greek which simply means “PAID.” The sinner that believes in Jesus Christ is thus free from his debt of sin against God, for JESUS PAID THE DEBT! God’s word assures us that the believer’s debt has been canceled in Colossians 2:14, “HAVING CANCELED OUT THE CERTIFICATE OF DEBT consisting of decrees against us, which was hostile to us; and He has taken it out of the way, having nailed it to the cross” (NASB). Is the reader “debt-free” or are you still “spiritually bankrupt” before God? (206.1) (DO)